The point-of-service paradox: freedom vs. happiness

A recent survey of more than 3,000 health care consumers yielded lessons for physicians and administrators in both pure HMOs and "point-of-service" plans, which allow patients to see out-of-network providers if they pay a higher copayment. POS plans continue to be a popular option, but they trailed HMOs by a striking 54 percent to 44 percent in the percentage of enrollees rating themselves "extremely" or "very" satisfied with their coverage.

HMO doctors and administrators, however, should note that their plans did less well among sicker patients. In this group, only 41 percent of HMO members were "extremely" or "very" satisfied, compared with 43 percent of POS plan members.

But there was more bad news for POS plan administrators in what has been called the paradox of POS. While the freedom to go to an out-of-network doctor is highly prized, patients evidently dislike much of what happens when they exercise that freedom. POS enrollees used out-of-network care an average of 2.76 times a year, but the resulting paper work contributed to the less-than-rave notices in the first graph above. And as the graph at right shows, members don't like the higher costs that are part of the POS bargain, either. The survey suggests a philosophical dilemma: Should plans try to give the people what they want, or to make them happy?